A public dispute between World Liberty Financial and Tron founder Justin Sun has moved into federal court, drawing responses from Eric Trump and Zach Witkoff as the conflict widens. Sun said he filed a lawsuit in California federal court to protect his rights as a holder of WLFI tokens. He alleged that the project team froze his tokens, removed his governance voting rights, and threatened to burn the tokens without proper justification.
World Liberty Financial rejected those claims. Zach Witkoff said Sun’s case was a “desperate attempt” to shift attention away from his own conduct and said the claims were without merit. Eric Trump also backed the project team, writing on X that the group was proud of World Liberty Financial and dismissing the lawsuit in blunt terms. The exchange has placed a Trump-linked crypto project and one of its earliest backers in a direct legal confrontation.
Justin Sun Says Frozen Tokens Led to Court Action
As we reported, Sun said he remains supportive of President Donald Trump and the administration’s push to make the United States more friendly toward crypto. He said the lawsuit was not directed at Trump or his administration, but at certain people operating the World Liberty project. According to Sun, those individuals acted in a way that went against the values he associates with the president.
In his statement, Sun said the team froze all of his tokens, stripped his right to vote on governance proposals, and threatened to destroy the tokens through a burn process. He also said he tried to resolve the matter privately before going to court, but that the team refused his requests to unfreeze the tokens and restore his rights. Sun said he only wanted equal treatment with other early investors.
Sun also criticized a governance proposal published on April 15. He said the proposal would require token holders to affirmatively accept new terms or face indefinite token locks. He added that the proposal would require 10% of all advisor tokens to be permanently burned and would impose a two-year cliff followed by a two-year vesting schedule for early purchaser tokens. Sun said he could not vote on the proposal because his early investor tokens had been frozen.
Eric Trump and Zach Witkoff Defend World Liberty Financial
World Liberty Financial pushed back forcefully. Zach Witkoff said Sun’s lawsuit was meritless and said the company looked forward to getting the case dismissed quickly. He also said Sun had engaged in misconduct that required World Liberty to take action to protect itself and its users. The project did not provide detailed evidence in the social media exchange, but its representatives said they were prepared to defend their position in court.
Eric Trump echoed that stance in his own post. He mocked the lawsuit and publicly praised the World Liberty Financial team. Those comments added a political layer to the dispute because Sun had framed part of his case around what he said were actions that Trump would not support if he knew the details.
The latest exchange followed a sharper warning from World Liberty Financial earlier in the week. The project wrote on X that it had the contracts, the evidence, and the truth, and told Sun it would see him in court. That statement came after Sun accused the team of using users as a source of fees and criticized its recent financial activity.
Earlier Token and Lending Tensions Set the Stage for the Lawsuit
The conflict did not begin with the current court filing. Earlier reports tied the dispute to a recent loan involving a connected DeFi project. World Liberty Financial had deposited 5 billion WLFI tokens as collateral on the lending platform Dolomite to borrow about $75 million in stablecoins. Sun publicly criticized that move and said actions taken by the team to extract fees from users were illegitimate.
The disagreement also appears linked to an earlier decision to freeze Sun’s WLFI tokens in September. World Liberty Financial had alleged that Sun tried to sell the tokens to cash out early, while Sun denied that accusation. The material provided also said on-chain data supported Sun’s denial.
The legal clash marks a clear break from the relationship the two sides once had. At Consensus Hong Kong last year, World Liberty Financial publicly credited Sun with helping the project during an early slow period. Now, the matter is headed to court, where the dispute over frozen tokens, governance rights, and project conduct is expected to be tested in formal legal proceedings.
